Business communications users continue to embrace the power of the
satellite at increasing rates, as can be seen by simple observations of
buildingtops in major metropolitan areas and in parking lots of
sprawling suburban complexes--where earthstation antenna spread their
metal petals skyward like the first spring flowers.

The demand for satellite-provided domestic communications services
will increase six-fold by the year 2000, according to projections by
NASA's Lewis Research Center in Cleveland. Synthesizing three
studies completed for the space agency by outside firms, NASA says that
potential satellite demand in the US should jump from a requirement for
400 36-MHz satellite transponders in 1980 to 2400 by the end of the
century.

NASA says that about 80 percent of the demand was found to be best
served by trunking (publicly owned) systems and about 20 percent by
privately owned systems with equipment on customer premises.

Another Great Growth Period

A study released last year by Predicasts, also of Cleveland,
reported that since the first US domestic communications satellite launch in 1974, service revenues topped $700 million. It predicts that
between 1983 and 1995 communications services distributed via satellite
will chalk up average annual gains of nearly 19 percent. Revenues of
about $2.2 billion are seen in 1988, and more than $5.6 billion by 1995.

The home market, too, will continue to soar dramatically.
Predicting a 25-percent growth in home satellite earth stations, Channel
Master's Donald Berg sees TV receive-only (TVRO) sales of about
500,000 units this year. He's also confident that last
October's passage of the Communications Act amendment of firming
the legality of home satellite dishes will help spur sales, even with
the probability of signal scrambling on some networks. Berg feels such
a move will have only a minor effect on sales. "There is so much
to watch on the satellites that the loss of a few channels will have
little impact on our potential consumer," he says.

Berg's Smithfield, North Carolina firm feels its primary
market remains the five million households in fringe areas where TV
signals are barely receivable. With less than a million dishes in use,
he says, the industry has a long way to go before the market becomes
saturated. Prices, he adds, will continue to "drift downward
slightly." His firm presently offers a complete system with a base
price of a little over $1300. "That's a great price,
especially when you consider that many families living in these fringe
rural areas will spend that much and more for conventional antennas on
50-foot towers with stacked antennas, plus a rotor and electronic
booster--all for possibly receiving two or three channels and sometimes
with snowy pictures."

Domestic communications satellites have carved a remarkable history
in little more than a decade, starting with Telesat Canada's launch
of Anik A series in November of 1972. The last of that original series
was finally retired last November, following the launch of Anik D2. In
the US, Western Union's Westar I became the first in this country
when it was launched April 13, 1974. That pioneer, too, is now retired,
as is RCA Americom's Satcom I, which had been launched in December
of 1975.

These early pioneers and the others who followed gave rise to a
host of new communications services or business and home, bringing with
them not only more advanced, more economical business services, but also
giving the entire cable TV industry a tremendous boost in audience and
bringing services to remote locations that would otherwise have been too
expensive to serve by conventional methods.

The same is true of Intelsat, which last year celebrated its 20th
anniversary. The global Intelsat network has not only tied the world
together "live via satellite," but also helped a number of
nations leapfrog from primitive communications systems to space-age
technology. Satellites have allowed third-world nations to avoid the
traditional "wiring-the-nation" phase.

Competition on International Scene

For the last 20 years, Intelsat and its member signatories (Comsat
in the US) have had the monopoly on international satellite
transmissions. That, too, is changing. Late last year, the FCC said
that companies other than Comsat and the major international record
carriers can now access Intelsat satellites directly.

Satellites have also modernized the maritime world, with the
42-nation Inmarsat system providing more advanced and more
cost-effective communications services to the world's shipping and
offshore industries. With satellite capacity in orbit over the three
major ocean regions, it presently provides service for about 3100 ships,
oil rigs and other vessels equipped with ship earth stations.

The power of the satellite can be seen in the recent partnership
venture of Holiday Inns and Comsat--creating a satellite-delivered
entertainment and videoconferencing network at Holiday Inn hotels
throughout the US. To be owned and operated by two subsidiaries, Hi-Net
Communications and Comsat General, the $52 million network will be
called Hi-Net Communications and begin operations this summer.
Transmitting via Kn-band satellites, the network will offer Holiday Inn
guests five channels of TV programming that will include Showtime movies
and specials, Cable News Network Headline News (CNN II), the
Entertainment and Sports Programming Network (ESPN) and a pay-per-view
package of recently released movies, concerts and other special live
events and videoconferencing. The partnership is building a broadcast
control center and satellite access uplink facility in Memphis to
broadcast to all US hotels.

New Nationwide NASA Network

NASA, which has provided satellite launch services for more than 25
years, is also a large user of communications services, and has plans
for a large satellite-based network for voice and high-speed data,
operating in the Ka-frequency bands (30/20 GHz). The network will
connect 14 major NASA domestic centers and Vandenberg Air Force Base,
and will eventually become the backbone for an expanded nationwide
network NASA has planned for the future. RCA Astro-Electronics has a
$260-million contract to build an Advanced Communications Technology Satellite (ACTS) and supporting ground stations. As prime contractor,
RCA will be responsible for the spacecraft and overall systems
management. Comsat Labs will be responsible for the ground segment,
which includes the NASA ground station and the master control stations,
and for operating the system. TRW is responsible for a multi-beam
communications package that includes the satellite antennas, feeds,
reflectors, traveling-wave-tube amplifiers and baseband processors. The
ACTS satellite launch is scheduled for 1989 aboard the Space Shuttle.

American Satellite Company has a separate $16-million contract for
NASA's advanced network. NASA's Robert Aller says the network
will replace approximately 50 percent of the point-to-point voice, data
and wideband circuits that make up the existing NASA communications
network, Nascom. Initially, all sites will be capable of transmitting
data at 15 Mb/s. Later, three to four major data centers will be
upgraded to 60-Mb/s capacity.

The distance-insensitive nature of satellite technology has brought
many cost-saving benefits, especially for larger users. For example,
the Associated Press last year purchased two transponders from Western
Union. The news agency expects to save $28 million over the next
decade, according to Richard Atkins, AP director of communications.

Federal Express, too, feels that the future is in the air. Last
September, it awarded Harris and Tandem Computers a contract to build
the first phase of a satellite-based data network that will be used to
support its ZapMail service. The first phase is to be operational by
July, and will replace terrestrial traffic between 16 US cities.

One major topic not mentioned here is direct-broadcast satellite
(DBS) service, a field with high visibility over the last few years, and
one with a dwindling number of participants. We'll cover DBS
separately in the next issue, as part of CN's annual three-part
special report on broadcasting, cable TV and closed-circuit TV.

For now, the following special report looks at some of the current
applications of satellite communications and the advancing technology.

COPYRIGHT 1985 Nelson Publishing
No portion of this article can be reproduced without the express written permission from the copyright holder.